WestStar Industrial Ltd (ASX:WSI), an Australian industrial services company providing engineering, construction and mining services to the resources, energy and infrastructure sectors, has a solid foundation for growth in 2020.
In August 2017 the company acquired engineering contractor SIMPEC and in November 2019 acquired large capacity fabricator Alltype with completion settlement date this month.
WestStar chief executive officer Robert Spadanuda said: “Alltype is a well-established and respected name in the industry and WestStar looks forward to pursuing strategic integration opportunities, along with a greater diversity in disciplines and proven client relationships that Alltype provides.
“This acquisition broadens WestStar’s horizons and will significantly accelerate it towards increased revenues and earnings.”
WestStar executed a share sale agreement to acquire 100% of Alltype Engineering Pty Ltd in a fully funded and all-scrip transaction, which included:
- Around $4 million of 100%-owned state-of-the-art property, plant and equipment assets; and
- All-scrip consideration of around $5.9 million upfront and deferred consideration subject to Alltype achieving FY20 EBITDA targets.
Alltype’s executive management team, including part owners managing director Kelvin Andrijich and chief operating officer Colin Heitman, will join WestStar to continue to manage the Alltype business.
Andrijich said: “We are excited by the opportunity to join WestStar and see it as a valuable opportunity for each of Alltype and WestStar to continue their growth with there being significant opportunities from a combination of the businesses.
“Colin Heitman and I look forward to joining WestStar as part of the executive management team, as well as new WestStar shareholders.”
WestStar’s growth strategy
Since acquiring engineering contractor SIMPEC, WestStar has secured or extended multiple contracts and hopes to do the same with Alltype.
Spadanuda said: “We have begun planning to integrate the Alltype business into the WestStar group and are excited by the meaningful opportunities it is delivering across an enlarged customer base.
“The increased tender book and increased probability of awards will further enhance and deliver on WestStar’s growth strategy.
“We continue to deliver sustainable growth with a focus on driving profitability across the group. We look forward to updating the market upon completion of the acquisition.”
Since July 2019, the total number of contracts awarded to the company and subsidiaries sits at around $30 million.